What we did

The Gannett Wisconsin Media review of charities tied to high-profile athletes and sports teams in Wisconsin began with finding them — a challenge since there is no comprehensive listing. We scoured IRS records, media coverage, state charity filings and an array of online resources to identify 51 charities. The listing includes only athletes who founded their own charity, not those who do charity work through larger, existing charities such as United Way. We then confirmed whether each group was listed by the IRS as a valid tax-exempt organization. Each of the nonprofits is required to file a version of Form 990, reporting revenue and other financial information to the IRS, so we reviewed recent filings and used the information to create a searchable database. (The database will be updated as the charities file new IRS returns and if additional athlete charities come to light.) We consulted two leading charity watchdogs — Charity Navigator and CharityWatch — about criteria for judging charities and used their methodologies to calculate financial and fundraising efficiency. In many cases we reached out to the athletes or their representatives to get context for the financial filings and details regarding their charity operations.

Charities tied to high-profile Wisconsin athletes and teams raise millions of dollars annually for dozens of causes, but IRS filings also reveal some report expenses improperly, use money inefficiently or fail to file reports at all.

And despite the inherently high profile of professional athletes, many athlete charities operate on a very small scale — more than one-third had revenue of less than $50,000, according to their latest IRS filing.

The Gannett Wisconsin Media Investigative Team identified 51 active or recently shuttered charities connected to Wisconsin athletes and professional teams, compiling a list based on IRS public records and an array of online resources. No group maintains a comprehensive listing of charities connected to athletes or teams. To fill that void, the I-Team assembled a searchable online database of athlete-related charities.

Of the 51 charities, 43 are active and up to date with their IRS filings. Six other charities have had their tax-exempt status revoked in recent years for failing to file returns. One has not filed a return since 2002 and one has disbanded.

Jon McGlocklin, who co-founded Midwest Athletes Against Childhood Cancer, one of the state’s largest athlete charities, said charities must be run like a business to succeed.

“It’s a full-time, full-fledged business, so like in any business, you’ve got to have full-time attention, full-time effort and the right people in the right seats,” said McGlocklin, who helped the Milwaukee Bucks win an NBA championship in 1971 and went on to a lengthy career in the business world.

Four of the charities examined by Gannett Wisconsin Media brought in more than $1 million in their latest IRS filing. Rawhide boys ranch reported $10.6 million in revenue, and McGlocklin’s MACC Fund came in at $4.2 million. Team charities for the Milwaukee Brewers and Green Bay Packers rounded out the list at $2.4 million and $1.5 million, respectively. Rawhide was co-founded by former Packers quarterback Bart Starr and runs a program for at-risk children near New London.

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Of the 43 active charities, 16 reported less than $50,000 in revenue in their latest annual IRS filing, and 29 were at $250,000 or below.

Daniel Borochoff, president of CharityWatch, a Chicago-based charity watchdog group, said the small charities and string of revocations show athletes’ charity work can sometimes be motivated by “image enhancement” more than altruism. He noted that athletes have access to owners, agents and other players who could yield considerable benefits for a charitable cause.

“If you’re a big-time athlete, you’ve got the mansion, you’ve got the model girlfriend, what other notch can you have on your belt? Well, having your own charity,” Borochoff said. “You’re in a position to raise some very significant money, and if they don’t, it does make one question their sincerity or their motivation for their cause.”

Measuring efficiency

Athlete charities have drawn fire nationwide after the Boston Globe revealed Alex Rodriguez of the New York Yankees distributed only 1 percent of the money he received, and ESPN reported NBA player Lamar Odom ran a cancer research charity for eight years without giving a dollar to that cause.

No charityreviewed for this report fell so short in terms of efficiency, though Gannett Wisconsin Media has detailed a host of problems with former Green Bay Packer LeRoy Butler’s charity work, including operating for 10 years without filing financial statements with the IRS and blending charitable and for-profit ventures.

Charity watchdogs say at least two-thirds of expenses should go toward fulfilling an organization’s charitable purpose, and most Wisconsin athlete charities met that threshold. Seventeen of the charities were required to report efficiency, and 12 put more than two-thirds of spending toward their charitable purpose.

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Efficiency numbers are required only for public charities that fill out the traditional Form 990, not smaller charities or private foundations. Public charities receive the majority of their support from the general public, while private foundations are paid for through one or several major donors.

The MACC Fund, which raises money to fight childhood cancer, has been hovering near the two-thirds threshold for years, reporting 75 percent efficiency in 2012 and 68 to 69 percent in the three years prior. That is part of the reason the group was rated two out of four stars by Charity Navigator, the nation’s largest charity rating service.

Karen Armstrong, controller for the MACC Fund, said her organization hired an accounting firm to examine Charity Navigator’s ratings and found the group has been penalized for reporting long-term grants in the year they were promised rather than proportionally over time. She said that will change.

Rawhide has been at 83 or 84 percent efficiency each of the last three years. It is rated three out of four stars by Charity Navigator.

The Charity Navigator website says seven of every 10 charities they evaluate have efficiencies of at least 75 percent and those below 66 percent efficiency “are simply not living up to their missions.”

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Athletes with charities below the two-thirds efficiency in their latest filing were former Packers Donald Driver (64 percent) and Brett Favre (52 percent), and former Bucks center Samuel Dalembert (18 percent). Favre posted significantly better efficiencies in prior years, and Dalembert was above the two-thirds mark for several years before plunging to 39 and 18 percent the past two years.

But Driver’s charity, which had nearly $500,000 in revenue in 2011, has consistently fallen short of the mark. The Donald Driver Foundation’s 64 percent efficiency in 2011 was actually its best mark in several years, as that number came in at 44 percent in 2010 and 52 percent in 2009. The efficiency percentage has topped 70 percent once since the charity was formed in 2003.

Driver told Gannett Wisconsin Media in an email the numbers appear lower because his foundation has been intentionally building cash reserves since 2009 to assure it survives long term. Driver said 80 percent of revenue went toward charitable programs or into savings in 2011, 66 percent in 2010 and 61 percent in 2009.

“I have consistently been advised that to reach our goal of sustaining this foundation for generations, it will be important to build up financial reserves for the future,” Driver said.

Susan Walker, director of the Favre 4 Hope Foundation, said the charity’s numbers have changed since Favre limited his involvement after his 2010 retirement, reducing donations and holding no fundraisers.

The Vince Lombardi Cancer Foundation posted a 30 percent efficiency for 2011, but that is due to a recordkeeping quirk, said Adam Beeson, a spokesman for Aurora Health Care, which has run the Lombardi foundation since 1989. The foundation’s board approved two years worth of grants in 2010 instead of the usual one, so the group’s IRS filings list $1 million in grants in 2010 and less than $90,000 in 2011, even though Beeson said about $500,000 was paid out both years.

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IRS reporting

The efficiency numbers have value only if they are reported correctly, and several charities violated IRS guidelines while claiming to be 100 percent efficient.

Sandra Miniutti, a vice president at Charity Navigator, said 100 percent efficiencies are a “huge red flag.”

Charities for former Wisconsin Badgers basketball star Michael Finley and former Packers defensive linemen Gilbert Brown and Vonnie Holliday stated in their most recent filings that every penny went toward their charitable purpose. The Form 990 requires charities to list each expense as funding the charitable purpose, management or fundraising.

IRS instructions for the Form 990 specify that office management and accounting are among the expenses that must be reported as a management expense — not a charitable one.

On the other side, the MACC Fund is among the charities that list only grants paid out as charitable expenses, labeling all other costs as management or fundraising.

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Executive salaries

Only four of the 43 active charities fund at least one full-time employee, though seven others list costs for employee salaries and benefits.

The top salary among Wisconsin athlete charities went to MACC Fund Executive Director John Cary, who in 2012 received a $178,000 salary and $59,000 in benefits. His salary was $173,000 in 2011 and $174,000 in 2010.

McGlocklin said Cary’s salary is set by a management committee that reviews comparable charities in the Midwest, and Armstrong said the charity also takes into account Cary’s 30 years of service.

The median salary for CEOs at the 235 medium-sized charities in the Midwest was $131,692 in 2011, according to the most recent compensation study from Charity Navigator. The group defines medium charities as those with total expenses between $3.5 million and $13.5 million.

John Solberg, executive director of Rawhide, had the second-highest salary at $124,000 in 2012, in addition to $29,000 in benefits. The Brewers Community Foundation technically has no employees, but it has a full-time executive director, Cecelia Gore, who receives a $121,000 annual salary from the Brewers.

Other athlete charities across the country have drawn fire in the past for large salaries paid to family members, but only one Wisconsin athlete’s charity has a relative identified on the payroll. The charity for Marquette University alumnus Dwyane Wade paid his sister, Tragil Wade, $49,000 in 2012 for putting in 40 hours a week to run his charity.

Among the charities examined by Gannett Wisconsin Media, McGlocklin is the only athlete who gets a salary for his charity work, and the only one who works full time for his organization. McGlocklin joined the staff full time in 2006. His 2012 salary as MACC Fund president was $87,000, which he said is funded through a grant from Albert “Ab” Nicholas, a Milwaukee philanthropist and longtime MACC Fund supporter.

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Fundraising details

Six of the 17 charities required to detail their expenses reported spending money on fundraising in the most recent fiscal year, and their efficiency ranged widely.

Wade’s charity — the only one to use professional fundraisers — was the most efficient, spending $2.59 on fundraising for every $100 in revenue. Driver’s charity was second best at $7.75 per $100 in revenue.

The Vince Lombardi foundation was the least efficient of the six, spending $24.08 on fundraising for every $100 in revenue. The state’s two largest athlete charities both spent more than $500,000 on fundraising in 2012, with the MACC Fund committing $14.19 per $100 in revenue and Rawhide laying out $11.47.

The fundraising cost reported on the IRS Form 990 does not include the cost of fundraising events such as golf outings, dinners or bowl-a-thons. Nearly all organizations that held fundraising events reported making money on them, with admission fees and additional donations more than covering costs.

Charity watchdogs vary on their fundraising guidelines. Miniutti said Charity Navigator likes to see $13 or less spent to raise $100, though the group only examines charities with at least $1 million in revenue. The CharityWatch website says $35 or less to raise $100 is reasonable for most charities.